"He was arrested on suspicion of being concerned in the commission, preparation or instigation of acts of terrorism under Section 41 of the Terrorism Act 2000", the police said in a statement published late on Sunday.
Twelve others who were arrested in the early stages of the investigation were all released without charge.
On Sunday police released images of the terrorists' blood-spattered fake suicide belts.
Australian Candice Hedge was working at Elliot's Cafe in Borough Market when attackers Khuram Butt, Rachid Redouane and Youssef Zaghba launched their van and knife rampage. "The kitchen knives, each measuring 12 inches, are branded Ernesto and are ceramic, rather than metal".
Butt was also arrested for fraud last October but was about to be told by prosecutors he would face no further action.
Police are asking for help in figuring out where this knife was purchased. Scotland Yard last night released photographs of the fake suicide belts Butt, Redouane and Zaghba wore during the attack. Where might the attackers have bought them from?
"At that point, I didn't know if the shots were us or potentially the attackers".
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The phoney bombs were simply disposable water bottles wrapped in silver and black tape and attached to leather belts, although they were designed to create "maximum fear", police said.
"I have not seen this tactic in the United Kingdom before where terrorists create maximum fear by strapping fake explosives to themselves", he said.
The 34-year-old said: 'They were behind me so I couldn't see, one was standing basically beside me as I was huddled down in the corner.
Mr Haydon said it was hard to speculate to what end the attackers wore the belts, although it may have been to take hostages or as a defensive strategy.
"It could be that they had plans to take the attack in to a siege situation or it might be that they saw it as protection from being shot themselves".
British police said Saturday that Butt, the ringleader, tried to rent a 7.5-ton truck online on the morning of June 3, but did not provide payment details when prompted.
LONDON, June 10 (Reuters) - London will not be cowed by militants who have killed 35 people in three separate attacks in Britain, but police will ask for more resources to tackle the threat from marauding assailants, London police chief Cressida Dick told Reuters on Saturday.
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